Aarni's Blog

This is a guest article by Michael Zipursky, author and marketing consultant, and Co-founder of Business Consulting Buzz, a leading consulting blog, and FreshGigs.ca, Canada’s jobsite for marketing, communications and creative professionals. Michael’s work has been featured in FOX Business, Financial Times, Macleans, HR Executive and many other publications.

The value of providing world-class customer service in your business is now beyond doubt.

In years past companies would often stick their heads in the sand and hope that a dissatisfied customer would simply disappear...believing that their single voice wasn't large enough to impact the business as a whole.

That approach never made sense. Today, we live in a world where customers can spread their influence and reach thousands of others in an instant through social media, the head in sand, cover your eyes and hope approach, can now be detrimental to a business.

To help you ensure that your business provides the best possible customer service and experience, here are 5 ideas for you to consider.

Everyone must know how to respond. Just because you or management understands your company's mission statement and view on customer service, doesn't mean everyone in the organization does. Put your customer service principles down on paper. Share it with all employees and encourage discussion around it. Customer service should be an on-going conversation at every business...and you should always be on a quest to continually improve it for your customers.

Reward those that practice. Find those people in your business that your customers talk about. Or that continually bring in more business, or resolve more issues...these are people doing something right. Make them an example. It will encourage them to work even harder and those around them will see that management takes notice when the right things are done. This simple idea can transform a whole organization and have everyone working to provide a better experience for customers.

It's not about satisfaction. Jeffrey Gitomer is known for saying that companies need to get beyond 'satisfaction' and start generating 'loyalty' with their clients. This is done by providing WOW experiences and creating an environment that constantly impresses your customers. Go beyond what they expect. To do this, think about what the status quo is in your industry for every area of your business that touches your customers and then figure out how you can up the ante and deliver more value than anyone else.

Real leadership. Everyone, as in every single person, in your organization can influence the customer service your company provides. Robin Sharma talks about the "Leader without a Title" and how "your job is just a J-O-B if you make it one". What he means is that regardless of whether someone is in a marketing job, works in sales, or reception, employees at every level can and should be encouraged to lead and provide customers with the best experience possible.

Forget policies. If you've ever heard someone say to you, "sorry, we have a policy against..." then you will already know what I'm getting to. Your company very well may have rules that you want followed regarding what you can and can’t do. To your customers however, telling them you can't do what they want because of a “policy” is meaningless. They don't care if you have a policy. Companies that provide world-class customer service empower their teams to work with their customers and go above and beyond the 'normal' to ensure their customers' happiness. That doesn't mean your customers are always right or even that you have to give them everything they ask for. What you CAN do is your best to provide an amazing experience for them. And when you can't, simply tell them so in a human way. Not that you can't because of some "company policy."

You may be reading this, and I hope agreeing with some of the ideas, but also saying to yourself, "this point isn't applicable to my business, it's good for the hospitality industry, but surely this doesn't work at our technology/manufacturing/insurance business, right?" Wrong.

Every business, regardless of industry or location can and should put their best foot forward to provide their customers with an amazing experience. If you don't, your competitors will.

An interesting Fortune interview of Jim Bush, the customer service czar at American Express, shows how fresh thinking in mundane operations can drive great results. A wake up call for change was the annual survey revealing that 7% of consumers feel they're getting good service; 93% are not getting service they expect. The simple recipe for change was to follow the Golden Rule: treat others as you would like to be treated.

How did AmEx put their ideas into action? From the interview I would highlight these practices

• Throw away the script; every customer wants to converse with a human being, not a robot
• Train service center personnel to be customer care professionals
• Focus less on the time spent on the phone as a measure of productivity
• Offer the service person high quality analytic information about the customer and let that information lead the conversation
• Collect feedback for every servicing transaction from the customer and use that to measure performance
• Drive advocacy of impassioned customers who tell others about there positive experiences

AmEx has been able to track the effects of customer service all the way to shareholder value. For a promoter who is positive on American Express, they see a 10% to 15% increase in spending and four to five times increased retention. Furthermore, operating expenses associated with service have gone down because of the streamlined operation.

Photo: iStockphoto

IT investments have a greater impact on companies' profits than comparable spending on either advertising or R&D. That is the conclusion that a group of professors draw from their recent study. However, investing in IT to cut cost is not worthwhile, they say.

Sunil Mithas, Ali Tafti, Indranil Bardhan, and Jie Mein Goh used data from 400 global companies from 1998 to 2003.  They found that information technologies deployed since 1995 have a significant positive impact on profitability.  Even though IT investments gave a better yield than advertising or R&D there was more variability in their effects.

Another interesting find was that certain kinds of IT investments appeared to improve profitability more than others. Smart use of technology can enhance profits in two ways: through cost reduction and through revenue increase. The study showed that IT investments were more effective in improving profitability by increasing revenue than by decreasing operating expenses.

The authors claim that a $1 increase in IT expenditures per employee was associated with $12.22 increase in sales per employee in the study group. When IT spending was increased in order to reduce overall operating expenses the effect in the sample of companies was negligible.

The third interesting conclusion of the study was that as industries become more competitive, the effect of IT on profitability increases. Furthermore, IT investments had a greater effect on profitability in the service sector than in manufacturing.

The study "Information Technology and Firm Profitability: Mechanisms and Empirical Evidence" was published in MIS Quarterly 36, no. 1 (March 2012) and an article based on the study in MIT Sloan Management Review Vol 53 no. 3, Spring 2012.

Photo: iStockphoto

Most designers offer their services through short-term projects, which means that the client-designer relationship is often temporary. What are the other types of designer-client relationships and how are they best managed?

The relationship quadrants

Two aspects are important when characterizing client-designer relationships:

1) The scope of the service

2) The role of the designer in the client's process

The scope of the service can be either a project or an ongoing process. In both cases, the role of the designer can be either assistive or participative. In order to compare the two types of scope and the two alternative roles, we can visualize a matrix with four relationship types (see diagram, below).

Each type has different goals, opportunities, risks, and competitive strategies associated with it. Here is a short characterization of the four relationship types:

A) An assistive role in a project – The Project Supplier

• Driver: Client’s need to get a solution to a single, well defined problem.
• Duration: Short-term agreements.
• Designer's goal: To be awarded the supplier’s contract.
• Competitive factors: Price or service performance.
• Critical success factor: Price-quality ratio.
• Designer should know: Decision-makers and their criteria for providers; customers’ needs; ways to improve your own productivity

A project can be the start of a successful designer-client relationship. However, many clients feel that they have to tender each project, which makes this kind of relationship potentially transitory.

B) An assistive role in an ongoing process – The Outsourced Process Provider

• Driver: Client's determination to focus on core business.
• Duration: Long-term, ongoing service.
• Designer's goal: To allow the client to focus on their core business.
• Competitive factors: Provision of cost-effective services.
• Critical success factor: Integration into the client’s processes.
• Designer should know: The right service scope and the client’s own cost for providing the same service level.

It is naturally good business practice for a client to focus on their core business. Therefore, many companies want to outsource processes that they consider complementary. This provides a design company with the opportunity to build a long-lasting relationship with the client. Clients are very cost-conscious in outsourcing deals, so the designer must be able to provide a high-quality service cost-effectively.

C) A participative role in a project - The Consultant

• Driver: A strategically important issue that requires a solution.
• Duration: An ongoing relationship with recurrent projects.
• Designer’s goal: To create and maintain a trusted relationship.
• Competitive factors: Strategic thinking; understanding the client-s business.
• Critical success factor: Ability to improve the client’s competitive position.
• Designer should know: The client’s strategy.

The difference between a type-A relationship and a Type-C one is that, in the latter, the designer contributes more directly to the competitiveness of the client. The designer can be, for example, taking part in a new product or process design that improves the client's core business. A designer is a trusted advisor, even though the relationship is formed around projects.

D) A participative role in a process – The Strategic Partner

• Driver: New business value that can be derived from working together.
• Duration: Long-term relationships.
• Designer’s goal: Shared business goals with the client.
• Competitive factors: Ability to provide unique value to the client.
• Critical success factor: Partnership-management competence.
• Designer should know: Strategic fit with the clients is key; risks related to working together.

This relationship type is the most mature and the most demanding. It is similar to a joint venture, where the client and designer share a vision and a strategy. They also share the business risk to a certain extent. David Lewis certainly had a strategic relationship with Bang & Olufsen. The work of Lewis’s company played a crucial role in B&O's success.

Which relationships to pursue?

All of the four designer-client relationship types have their pros and cons. Some designers are perfectly happy taking on projects that have a limited life span. Some strive to build long-term relationships. Whichever your strategy, it’s advisable not to rely on one single relationship model. By developing a range of models, your company increases its chances of success in a business world where uncertainty has become the norm.

Service designers rightly emphasize how service development should start from the customers, and their needs and motivations. Service is collaboration between the customer and the provider. It is, therefore, important to make sure that the provider has the will and means to deliver the service as planned. To accomplish this, service design should integrate with business design.

As a management consultant I've been involved in dozens of service-development projects. In some cases I've been able to help my client for years, starting from the first ideas, until the service is in its second or third development cycle. A couple of years ago I devised a framework for communicating the service-development life cycle. It is suitable for both B2B and B2C services, even though I've mainly used it in business-to-business cases.

The framework has two halves. The upper half denotes the customer's and the lower the company's viewpoint (see the illustration).

1. Needs and strategies

The first phase is related to understanding what the customers want to achieve. The purpose of a service is to make customers perform better in their everyday tasks. When you know the outcome that the customer wants — for example, less time used, fewer errors and less waste — you can start making strategic choices on the needs you want to satisfy. A service strategy also defines what means you want to use to achieve your goals.

A software company I know had identified the need to improve construction-site management. It started off with scheduling and production control. It found out that the best way to do that was to make a virtual model of the construction. That opened the doors to other applications later on.

2. Service concept and business model

After you have decided on your strategy, you can create a concept-level plan of the service. The concept defines what the benefits of using your service will be, and what the service does. In other words, you'll have to look at the service through your customers’ eyes and understand what kind of service helps them do their work better. 

Another thing to consider is the maturity of the customer in relation to what you can offer. For example, the construction management software firm realized that it had to offer both software and people to operate the software for the first customers.

During the concept phase you can already start creating a buzz around the service; do test marketing, and perhaps make some service prototypes. Customer relationship building starts at this stage. On your company's side you'll have to define the business model that makes offering the service feasible. A business model includes the revenue and cost logic of the service.

3. Service design and operational model

The third phase focuses on the delivery of service. You will design the service and create the business platform for delivering it. This is the phase where you prototype, test, and launch your service. You will need the right people, systematized processes, and technical solutions to make the service delivery cost-efficient. Getting the right kind of customers and exceeding their expectations is the best marketing you can do.

4. Relationship value and improvement

The fourth phase is all about establishing the service as a first choice of existing and new customers. They will get more value from your service than anywhere else. You'll strengthen the customer relationships through learning and cooperation. You must systematize the service to a point where you can scale it up for an enlarged customer base or for new markets. 

The model I have outlined is adaptive and dynamic. You must and you will go back to adjust your earlier assumptions. Improving the outcomes and making your processes more efficient guarantee that your business  grows profitably in the years to come.

Our very first iPad app, Thinking Portfolio® Risk Analysis, is now available on App Store.

The app helps you in the identification and analysis of project risks and opportunities. You can use it effectively in all kinds of projects, large and small.

Studies suggest that around a third of all projects fail. One of the most under-reported areas of project failure is risk management. In many cases the management has neglected proactive risk identification, analysis, and mitigation. All too often project managers and steering groups address problems reactively, causing schedules and budgets to be exceeded. This leads to schedule slippage, budget overruns, and staff overtime, even burnout.

Thinking Portfolio® Risk Analysis makes proactive project risk identification and analysis an engaging, positive experience.

The application is intuitive, versatile, and visual. It makes it easy to determine and discuss project risks and opportunities, analyze them visually, and share the results within the project management team.

Check it out at http://www.thinkingportfolio.com/riskanalysis/ or go directly to App Store to buy it.

I just devoured Find Your Next by Andrea Kates. What a timely book! She addresses the very questions that many companies are struggling with. The business environment has changed enormously in the last ten or even five years, and companies need new ways of thinking in order to prosper. This book offers tools for just that.

The next great thing in your business can begin when someone in your organization has an idea or a hunch. Kates writes that until now, the journey to follow that idea would have started with dissection; measuring strengths, evaluating past results, and scrutinizing industry peers. The existing silos of thinking would define the options for an analysis. But she insists that the new way of thinking is not to tweak each element individually. The way to go is to create something bigger and all-inclusive, and then create a game plan how to get there

Find Your Next taps into new patterns that have been proven to drive business growth. These patterns draw inspiration from genomics. Scientists have been able to identify, map, and learn from patterns of DNA. In the same way, you can break down the core DNA of your company into basic elements. 

Kates presents a framework of six key elements of business DNA that define the success of a company. The six elements of the business genome are:

1. Product and service innovation
2. Customer impact
3. Process design
4. Talent and leadership
5. Secret sauce
6. Trendability

A company that wants to "find its next" can use the framework as a system to sort through ideas and use them to create a new, integrated combination. Kates underlines that business genomics combines art and science; identification of business opportunities is part intuition, part analysis. "The last era was about models and forecasting. Today's era is about foresight."

The sections detailing the use of the six elements of the business genome contain great ideas and tools for business developers. Kates also introduces a four-step process to use the framework. The process starts with simple questions:

• Are you at risk of becoming obsolete? Are you facing a shift in your market?
• Are you off-trend?
• Do you have a hunch that there's a new direction you should be pursuing?

One of the best ideas I got from the book is to use other industries as a source of new perspective. Often the signs of your future already exist in related and even unrelated industries. Influences from other industries are shaping customer requirements and that is happening at a faster pace than ever before.

Kates refers many times to the new role of the customer. The product and service discussion belongs to the customer now and it is often global. Manipulating customers to tell us what we want to hear does not translate into market leadership. Brands are defined by customers not by the companies that own them.

Companies face challenges internally as well. “Old school” leaders have learned that new generations have values, modes of communication, and beliefs that are foreign to them. Diversity is on the rise and employee motivation is not based on money alone. 

"The age of innovation is here to stay, and the bar for inventiveness will only continue to get higher," Kates claims. However, she draws attention to a disturbing fact. Leaders might want their organizations to be more innovative, but often fill their top positions with non-innovators.

The book presents great case studies of the way genome thinking works. Most examples are from B2C companies, but many of the ideas are applicable to B2B. In fact, the book encourages cross-disciplinary thinking. "Don't think industry-specific, think focus-specific," she advises.

I second Seth Godin's praise for the book: "Every great strategic thinker uses the ideas in this book...but it took Andrea Kates to write them down for the rest of us."  I'm certainly going to recommend Find Your Next to my clients!

Find Your Next: Using the Business Genome Approach to Find Your Company’s Next Competitive Edge, at amazon.com

If you are a solo consultant or run a small consultancy, you can face a situation where you either lack the manpower or the expertise to serve prospective clients. In that case partnering could be a feasible solution. There are three basic ways to invigorate your business through partnering: operational, tactical, and strategic.

Operational partnership

If you just need "more hands," an operational partnership is the way to go. Connect with peers or junior consultants who can work side by side with you. For example if you need to interview 100 people or do some other resource-intensive work you could use a trusted companion. 

A good operational partner respects your business relationships with your clients. However, I recommend that you have a mutual written agreement with your partner. In the agreement, define the distribution of work, the responsibilities, and the duties of both parties.

Operational partnerships can offer cost savings and increase your capacity.

Tactical partnership

When you see that you could offer more by having a good partner, then you are building a tactical partnership. For example a marketing consultant could partner a sales expert or an R&D consultant.

Sometimes a client needs services in locations where you cannot operate easily. Form a partnership with a local consultant to serve your client optimally.

Tactical partnerships expand your reach and they open new opportunities when partners market each other's services.

Strategic partnership

If you and your partnering company together can offer something unique that is vitally important for both parties, you are in a strategic partnership.

I know examples where a large and a small organization have created a successful partnership. The smaller consultancy is the innovator whereas the larger has an extensive clientele that needs the innovative solutions that the companies create together.

Strategic partners share a vision, they have the same kinds of values, and they want to work towards common goals. They exchange and accumulate knowledge openly with each other and develop their abilities together.

Strategic partnerships can lead to a unique position in the minds of the clients. If implemented correctly, they can also lead to growth that both partners would not be able to create on their own. Strategic partnerships are, however, very demanding and are seldom realized as planned.

Success factors

Whatever your partnership model is, it must be based on mutual trust, open communication, and a real win-win opportunity. Written agreements are necessary, but it is more important to understand why you are partnering and how much effort both parties are prepared to take in order to make partnering successful. Finally, it is the client who decides if your model creates a triple-win situation.

Photo: iStockphoto

Every consulting assignment is a learning and development opportunity. One good way to pass on that learning to future clients is to turn your experience into consulting tools. Consulting tools are methods, processes, templates, or software that you can use repeatedly, but with sensibility, to the client’s specific needs.

Business Consulting Buzz published my two guest posts this week:

From Scenarios to Vision – A Case Study

and 

Creating New Consulting Tools

In these articles I share my experiences on using and developing tools for managment consulting.